February sales better than expected; Limited and Zumiez top apparel segment

New York City -- Many retailers reported better-than-expected sales in February amid milder mid-month temperatures in many parts of the country. But some warned of a weaker March due the timing of the Easter holiday. Analysts also cautioned that rising fuel prices may damper consumer spending going forward.

The Thomson Reuters Same-Store Sales Index rose 4.2% in February, topping estimates for a 3.6% increase, and also rising higher than in the year-ago period.

February is considered the least important month of most retailer's fiscal first quarter calendar, as it generally is focused on clearing out winter-related merchandise, and preparing for the release of goods for the warmer weather ahead.

In the apparel segment, the winners included Limited Brands, whose same-store sales jumped 12%, topping the 8.5% average estimate of analysts surveyed by Thomson Reuters. Sales at its Victoria’s Secret chain surged 15%, while those at Bath & Body Works climbed 10%.

Zumiez continued its hot streak. The teen retailer said that February same-store sales jumped 12.8%, topping analysts expected 4.2% increase.

Gap, however, fell short of expectations, reporting a 3% decline in same-store sales. Thursday its revenue at stores open at least a year and the associated online sales declined 3% in February, hurt by weak sales in the Midwest.

By division, Banana Republic reported a 4% drop in same-store sales, while sales at Gap stores in North America dropped 1%. Sales at Old Navy North America fell 4%. International sales declined 7%. Analysts surveyed by Thomson Reuters expected a 4.2% increase.

This is the first month that Abercrombie 7 Fitch and American Eagle Outfitters did not report same-store sales on a monthly basis. The two teen retailers joined a growing number of retailers, including Wal-Mart Stores, that no longer report same-store sales each month.

In other apparel same-store sales results for February:

  • Destination Maternity Corp.'s sales gained 2.6%, helped by improving weather conditions later in the month.

  • Cato Corp. reported a 5% rise in sales, rose 5% percent in February, helped by a shift in the timing of income tax refunds and more favorable weather than in the year-ago period.

  • The Buckle’s sales were up 2.1%, short of analyst expectations.

  • Wet Seal's sales rose 7%, better than expected. Online sales rose 20% from a year ago. The company said it plans to open 30 new Wet Seal stores in fiscal 2011.

  • Hot Topic's sales fell 1.4%. Analysts had predicted a 5% decline.

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